Northwest's Production Data for One of Its Products Were Taken

question 65

Multiple Choice

Northwest's production data for one of its products were taken from the most recent quarterly production budget:
If it takes two direct labor hours to produce each unit and Northwest's cost per labor hour is $15,direct labor cost for August would be budgeted at:

• A)$16,500.
• B)$31,200.
• C)$33,000.
• D)$34,800.
• E)Some other amount.

---

Definitions:

Long-run Equilibrium

A state in which all factors of production and costs are variable, and economic agents have fully adjusted to any economic changes, leaving no incentives for further adjustments.

Minimum Average Cost

The lowest point on the average cost curve, signifying the most efficient scale of operation for a firm.

Decreasing Cost

Decreasing cost refers to a situation where costs fall as the scale of production increases, often due to efficiencies or benefits gained from economies of scale.

Differentiated Product

A product that has unique characteristics compared to other products in the market, often highlighted through branding and quality to compete on factors other than price.